Changing Indian Consumers & their appetite for premiumization

Just two decades back, the people were happy with Parle-G as a biscuit,Nirma as a washing powder and a tooth-powder or even daatun, for cleaning their teeth. But with every passing day, their needs and aspirations are changing. The anthropologist’s may say this is normal because as species evolve, consumer tastes also evolve, but the catch here is that along with their tastes, their buying pattern and point of purchases, is also changing. Now, they are no longer, interested in buying the same brand their ancestors were using and neither want to stick around with one brand.

The new India is young and dynamic and is willing to experiment. Perhaps that’s the reason, why you see, that today in every category, at least 5 brands are available. Also, now every brand is moving towards premiumisation. If we talk of biscuits category, gone are the days of glucose biscuits and now, we have players like Britannia coming up with a super-premium cookie ‘Chunkie’s’, which costs Rs.500/- per kg, a price quite high for Indian audience. But the market offtake data shows, that consumers are buying this. ITC Foods, has come up with its Dark Fantasy range of cookies, which is targeted at an equally premium segment. If we take of health segment, global brands working in the niche biscuit segment like McVitie’s, is working aggressively in ‘Digestive’range and Oats segment, through their ‘Hobnobs’ range of cookies and the health conscious Indian consumer, is responding by buying its products regularly. Even, innovation is being done in traditional biscuit range like Marie/Rich Tea, where newer varieties are being introduced by all players.

But hey, there’s a catch here!!! These are not aimed at the rich and elite class, which still has a craving for imported biscuits. These companies are targeting these new products at middle & lower income groups, as their price points are between Rs.20-Rs.50/-, which can be afforded. And as the products are really good, the chance of repeat purchase is pretty strong. This analogy becomes even true in organized/modern trade, where consumers can feel the product and are often tempted to buy these new products, thanks to its mouth-watering packaging.

Also, the traditional purchase points are also changing. Earlier, we used to be happy to go to the uncle-ki-dukaan(Kirana/General trade outlet) as it was close and gave us some petty discount, but now people are willing to take a cab and visit the super-markets like Big Bazaar & D Marts, shop in an AC environment and most importantly feel the products and not be influenced by the kirana retailer’s advice. Moreover, these super-markets will give customers a better deal in bulk buying and many customers can also redeem their Sodexo coupons, along with free parking. All in all, a happy deal, for a happy customer.

This new disruptive trend has forced the general trade (Kirana stores), to change the ways it used to function. Now, they are changing rapidly into self-service or standalone outlets in cities like Hyderabad & Bangalore, where customers can choose products and they are also giving new services like home delivery. The Big Bazaar is also working on a pilot project of home-delivery in small towns, to get an edge over such outlets.

This is just the beginning; keep your hunger alive for bigger things about to come. Bon appetite…

Management Trainee, United Biscuits